Regulators

Kenya Capital Markets Authority (CMA)

On December 15, 1989, the Kenya Capital Markets Regulatory Authority (CMA) was established.

Forex Regulatory Tips

Kenya CMA regulates leveraged foreign exchange.
The definition of leveraged foreign exchange is:
Foreign exchange (FX) is the speculation of one currency against another. It is a type of Contract for Difference (CFD), which is defined as an agreement to exchange the difference in the value of an asset at the beginning of the contract and at the end of the contract.
When opening a Forex and CFD account, an investor agrees to exchange with the agent the difference between the opening and closing prices of a Forex or CFD position. When taking a long (buy) position, he does not take ownership of the underlying asset, nor does he need to deliver the underlying asset when taking a short (sell) position. CFDs provide an easy way to speculate on different markets without owning the underlying asset on which the contract is based.

List of Regulated Companies

A total of 3 licensed foreign exchange brokers under supervision Full name of the company Abbreviation Regulatory number Regulatory status EGM Securities Limited FXPesa 107 Under supervision Pepperstone Markets Kenya Limited Pepperstone Markets Kenya 128 Under supervision SCFM Limited Scope Markets 123 Under supervision

Organization Profile

Institutional nature
A government agency is an independent, independent public agency.
Institutional History
Kenya CMA was established on December 15, 1989.
Regulatory functions
Kenya CMA responsibilities include the following aspects:
1.. Authorize and supervise all capital market intermediaries
2. Guarantee the legal behavior of all authorized legal persons and market institutions
3. Supervise the release of capital market products (bonds, shares, etc.)
4. Promote market development through research on new products and institutions
5. Improve investor education and public awareness and protect investor interests
Regulatory Objectives/Scope
The Kenya CMA is primarily responsible for regulating, authorizing, and monitoring the business of market intermediaries, including securities transactions, central storage and clearing systems, and individuals authorized by the Capital Markets Act. The CMA plays a key role in facilitating the mobility and distribution of capital resources.

Licence application

License Type

1. License type: transactional online foreign exchange broker (market maker), no-dealer foreign exchange broker (straight-through processing platform) and money manager
2. Business scope:
(1) Transactional online foreign exchange brokers (market makers) can trade as main-brand companies and market makers.
(2) Fund managers should-
(A) prudently select and manage investments for its clients;
(b) formulate an appropriate investment strategy;
(c) to hold positions in the market to meet the client's investment objectives;
(d) conduct financial analysis;
(e) Supervise foreign exchange portfolio investments on behalf of clients.
3. Online Forex brokers are not allowed to offer the following transactions:
(a) currency pairs involving Kenyan shillings;
4. Online foreign exchange brokers or money managers engaged in foreign exchange business should act in accordance with the principles of best practice at all times, and in particular should:
(a) adhere to high standards of honesty and fair dealing;
(b) act with due skill, care and diligence;
(c) adhere to high standards of market conduct;
(d) provide clients with information about their circumstances and investment objectives that may reasonably be expected to be relevant to enabling an online forex broker or money manager to discharge its responsibilities to clients;
(e) take reasonable steps to provide each client with any information required to enable the client to make a balanced and informed investment decision in an understandable form; communicate with the client
(f) To avoid any conflict of interest, such conflict unavoidable, ensuring fair treatment of clients when full disclosure or refusal to act always ensure that the interests of online forex brokers and money managers are never unfair to clients;
(g) maintain sufficient financial resources to fulfill the foreign exchange business commitments and bear the risks borne by the business;
(h) In the case of an online foreign exchange broker, ensure that all client funds are held in banks licensed under the Banking Act;
(i) For online foreign exchange brokerage firms, client funds should be segregated from their own funds, and client funds should not be used as margin, hedging or company assets at any time, including where the company is insolvent;
(j) Implement strict governance and risk management procedures throughout the business process, including the use of risk management procedures to handle stop losses, no negative accounts, double lock limited risk accounts, margin calls and closing procedures;
(k) Comply with the Crime and Anti-Money Laundering Act 2009 and the Prevention of Terrorism Act 2012;
(l) Responsible for the organization and control of internal affairs, with a clear distinction between the functions of the front office and the back office;
(m) have effective procedures and arrangements to deal with customer complaints;
(n) Adequate arrangements are in place to ensure that all staff employed by an online forex broker or money manager are suitable, properly trained and properly supervised and comply with clear regulations;
(o) adopt and implement written procedures for communicating with the public;
(p) deal with the Authority in an open and cooperative manner with respect to any matters relating to online foreign exchange brokers or money managers and keep the Authority informed that such matters may reasonably be expected to be disclosed to the Authority;
(q) To comply with the provisions of this Regulation and, in the event of non-compliance, notify the Authority immediately and in any event not later than twenty-four hours.

Regulatory Rules

Regulatory Inquiries

Step 1 Enter the official website of CMA in Kenya https://www.cma.or.ke/, select "LIST OF LICENSEES" (list of licensees) under "LICENSING & APPROVALS";< br />
Or go directly to the list of licensees list page:
https://www.cma.or.ke/index.php?option=com_phocadownload&view=category&id=49&Itemid=254

Step 2 After entering the "LIST OF LICENSEES" page, download the list file;

Step 3 The list contains all the dealers with financial licenses. You need to find the name of the dealer under "NON-DEALING ONLINE FOREIGN EXCHANGE BROKER".

Regulatory complaints

When you are not satisfied with your investment, you can file a complaint in 3 steps:
Step 1: Contact the Forex Dealer directly
When you have a complaint, the best way is to contact the Forex platform directly to help resolve it.
Step 2: If you are not satisfied with the processing result of the foreign exchange dealer, you can file a complaint with the Kenya CMA
If you are not satisfied with the dealer's response, you can contact the Kenya CMA to file a complaint.
There are 5 ways to complain:
(1) Submit a complaint online to the Kenya CMA.
Online complaint address: https://portal.cma.or.ke/complaints/
Online complaints require a registered account to log in.
Online Complaint Form Translation Reference Template (please click the image below to view the template):

(2) Submit a complaint to the Kenya CMA by mail.
Email Complaint Address: [email protected]
When filing a complaint by mail, the address of the complaint form to be downloaded: https://www.cma.or.ke/index.php?option=com_phocadownload&view=category&id=32:complaints-form&Itemid=217

Complaint form translation reference template (please click the image below to view the template):

(3) Letter to submit a complaint to the Kenya CMA.
Mail complaint address:
The Chief Executive,
Capital Markets Authority
P.O. Box 74800, 00200Embankment Plaza, 3rd FloorLongonot Rd, Upperhill, Nairobi, Kenya
(4) Submit a complaint to the Kenya CMA at your door.
Door-to-door complaint address:
Embankment Plaza rd 3 Floor, Longonot Road, Upper Hill, Nairobi
(5) Submit a complaint to the Kenya CMA by fax.
Fax Complaint Address: +254 (0)20 342825
Step 3: File a complaint in court
If you are not satisfied with the response of the forex dealer or the Kenya CMA, you can file a complaint in court.

Example of punishment

FAQs

1. The Kenyan Code requires independent audit entities to be rotated every 6 to 9 years. Do you need to rotate audit firms or individual auditors?
It is the audit firm that needs to be rotated. The requirement for rotation is designed to enhance the auditor's independence, objectivity and professional critique.

Related Links

Kenya Capital Markets Authority: https://www.cma.or.ke/
Kenya National Bureau of Statistics: https://www.knbs.or.ke/

Contact information

Address: Embankment Plaza, 3rd Floor, Longonot Road, off Kilimanjaro Avenue, Upperhill, P.O Box 74800-00200, Nairobi Kenya
Tel: 254 20 2264400/ 2264900/ 2221910/ 2221869
Mobile: 254 722 207767
Email:[email protected]

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